BT abandons Phorm

Shares in the company behind Phorm took a tumble today after BT said that it has no "immediate plans" to use the online ad system that tracks people's web use.

"We continue to believe the interest-based advertising category offers major benefits for consumers and publishers alike," BT said in a statement published by Reuters. "However, given our public commitment to developing next-generation broadband and television services in the UK we have decided to weigh up the balance of resources devoted to other opportunities.

"Given these resource commitments, we don't have immediate plans to deploy Webwise today. However the interest-based advertising market is extremely dynamic and we intend to monitor Phorm's progress with other ISPs and with Webwise Discover before finalising our plans."

BT provoked criticism after admitting that it had used Phorm in 2006 and 2007 without letting its customers know. The company then carried out an invitation-based trial of the technology at the end of last year, and these trials led to a number of complaints being made to the Information Commissioner’s Office and the police.

The European Commission is now investigating the use of Phorm and its implications for internet privacy as part of a case launched against the British Government in April. If the Commission finds evidence that Phorm breaches EU rules on the confidentiality of communications, the case could go to the European Court of Justice.